Stock Market & Financial Investment News

Baker Hughes U.S. rig count unchanged at 1,777Baker Hughes reports U.S. Rig Count is unchanged from last week at 1777, with oil rigs up 8 to 1416, gas rigs down 9 to 356, and miscellaneous rigs up 1 to 5. Says U.S. Rig Count is up 24 rigs from last year at 1753, with oil rigs up 101, gas rigs down 78, and miscellaneous rigs up 1. The U.S. Offshore rig count is 56, down 1 rig from last week, and up 4 year over year.

Morgan Stanley says Halliburton antitrust story mostly noiseMorgan Stanley analyst Ole Slorer views yesterday's Bloomberg article suggesting Halliburton's (HAL) acquisition of Baker Hughes (BHI) faces antitrust hurdles in the U.S. as mostly noise. Slorer spoke with an antitrust expert and concluded the article summarized well known facts and came away with a more constructive view of the deal. The analyst said Halliburton's "exceptionally diligent" handling of the transaction has minimized risks. Slorer's team raised Halliburton's price target to $62 from $60 and Baker Hughes' to $88 from $86 and maintains Overweight ratings on both stocks.

Baker Hughes weakness a buying opportunity, says Evercore ISIEvercore ISI said Baker Hughes (BHI) weakness is a buying opportunity and noted Halliburton (HAL) said it would sell any and all assets to get the deal done, ex-strategic items.

Baker Hughes reports Q2 North America revenue down 47% to $1.5BThe drop in revenue is primarily attributable to the reduction in customer spending, which has resulted in a steep decline in onshore and shallow water activity, and an unfavorable pricing environment. Reports Q2 Latin America revenue down 19% to $439M, largely result of sharp activity reductions in the Andean area, as reflected in a 43% drop in the rig count, and in Venezuela from decreased operations and unfavorable exchange rates. In Brazil and Mexico, activity reductions were more than offset by offshore share gains. reports Q2 Europe/Africa/Russia Caspian revenue down 22% to $869M, impacted by $100M related to the unfavorable change in foreign exchange rates. Reports Q2 Middle East/Asia Pacific revenue down 22% to $856M, driven primarily by lower activity throughout Asia Pacific, as reflected in the 12% drop in the rig count, and in Iraq as result of a reduction to our integrated operations, including exiting a large turnkey contract in mid-2014. Reports Q2 Industrial Services down 8% to $306M.

Baker Hughes says Q2 negatively impacted by deteriorating pricing, currencyCEO Martin Craighead commented, "Even though the severity of the revenue decline has compressed our margins, we have minimized the impact by aggressively reducing costs and rightsizing our operational footprint. These actions have resulted in decremental margins of 35% compared to the prior year, a significant improvement from the prior industry downturn. Furthermore, earnings for the quarter were impacted by an unfavorable tax rate which resulted primarily from a change in the geographic mix of earnings."

Halliburton has 90% upside potential over 3 years, says CitiCiti analyst Scott Gruber believes regulatory approval for Halliburton's (HAL) proposed acquisition of Baker Hughes (BHI) is a "high probability event." Halliburton's buyback potential post-acquisition looks significant, Gruber tells investors in a research note. He estimates $5.00 of pro forma earnings per share for Halliburton in 2018, suggesting 90% upside potential for shares over the next three years. The analyst notes that applying a 16 times earnings multiple yields a $78 share price. He keeps a Buy rating on Halliburton with a $54 price target. The oil services company closed yesterday up 75c to $40.74 after reporting Q2 results.